We are running out of time to make the changes necessary to avoid the worst impacts of climate change.
A recent report from the United Nations’ Intergovernmental Panel on Climate Change shows that the world needs to reduce greenhouse gas emissions by 43 per cent by 2030 to meet the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius by the end of the century. That is less than eight years away.
If we do not take aggressive action to reduce emissions drastically, we will not be able to stop the planet's warming and the consequences that stem from it.
In Canada, the federal government has pledged to reduce the country’s carbon emissions by 40 to 45 per cent below 2005 levels by 2030 and to achieve net-zero emissions by 2050. Its plan to reach these targets includes a new tax credit to spur the private sector to invest in technologies that capture carbon dioxide emissions from the atmosphere and subsequently use or store them.
While the tax credit is a good start, it does not go far enough to drive significant change in an important source of carbon emissions — heavy industry. This includes the manufacture of steel, cement, fertilizers and other chemicals.
Heavy industry is responsible for about 11 per cent of the country’s total greenhouse gas emissions, making it the fourth-highest emitting sector of the economy. It is also a sector that has been slow to move to more environmentally friendly processes, with its emissions dropping by only 10 per cent since 2005. Almost all that change is through minor retrofits and routine upgrades of legacy infrastructure, not the adoption of any particularly disruptive technology. This contrasts sharply with transportation and energy production industries, where electric vehicles and renewable energy have created disruptive change.
Heavy industry leaders and government decision-makers must identify, invest in, and adopt the right technologies to achieve more drastic emissions reductions. To do this, they must collaborate with private investors to determine the best clean technology projects and concentrate investment incentives there.
While the federal government’s new tax credit has the potential to kick start rapid development and adoption of carbon capture and storage technologies, its emphasis on carbon removal over carbon reduction misses an important opportunity to reduce emissions more quickly.
The current parameters for the tax credit do not include financial incentives for carbon abatement technologies that introduce new production processes to reduce or eliminate carbon emissions or that use low-emission materials to make better products. These innovations include carbon-free steel and cement that emits considerably lower emissions in its production process than conventional fossil-fuel-intensive methods.
In heavy industry, there are technologies to stop the overflowing tap of carbon dioxide emissions into the atmosphere instead of letting the massive leaks require more expensive removal and repair down the line.
These technologies have the advantage of being able to produce faster, short-term reductions in emissions than carbon capture and storage projects. Carbon reduction and carbon removal investments are critical to meet Canada's climate goals. Decision-makers in government need to give them equal consideration.
Industry leaders and governments also need to act faster regarding investment issues. Decisions about investing in clean technology projects and supporting large-scale demonstrations of them can take up to two years. That is too long, given the challenge's scale and the social and economic cost of unabated emissions in the interim.
Moving too slowly also risks private investment dollars flowing elsewhere, including to the United States, which offers generous financial incentives for investing in clean technology.
Suppose Canada wants to compete successfully for investment dollars in a global market. In that case, we need to speed up our decision-making processes and ensure that our investment incentives are competitive with other countries.
Canada is home to ground-breaking research into ways to reduce industrial emissions, but the heavy industry has been slow to invest in projects to decarbonise. To get the emissions reductions needed, its leaders must invest more significantly at the early stages of promising climate technology companies, encouraging a culture of risk-taking and innovation, as successful high-tech companies do.
To reduce emissions significantly by 2030 and get to net-zero emissions by 2050, it is imperative that industry leaders embrace innovative technologies and that governments design policies and financial incentives that support them. Quickly.